Trauma Insurance

Receive the necessary financial support when you and your family need it most.

Compare Trauma Insurance

If you fall critically ill or suffer a serious injury, you may be unable to work and your finances could be impacted. Taking out trauma insurance will help provide the necessary financial support to you, your partner or your family and pay for the cost of any medical treatment or rehabilitation. Find out the ins and outs of trauma insurance and how to find the best policy for your situation.

What is trauma insurance and how does it work?

Trauma insurance will help support you amidst critical illness or serious injury by providing a lump sum amount to help cover the immediate cost of medical treatments and other financial needs. This lump sum amount, also known as the sum insured, is agreed upon when taking out your cover. The sum that you’re insured for will directly affect the cost of your insurance premiums: if you choose a sum which is higher than you need, your premium will also be more than necessary. Should you choose a sum which is too low, you won’t have adequate cover and you, your partner or your family may not have the finances they need to support them.

The emotional and physical trauma involved with serious injury and illness is enough to bare, but the impact on your finances can further compound your issues. Trauma insurance can allow you to continue your recovery and limit the stress felt by your loved ones by ensuring your finances are covered.

What is covered by trauma insurance?

Trauma insurance policies can include a wide array of critical illnesses or serious injuries. The inclusions will vary between policies but at a minimum your policy will cover different forms of cancer, heart conditions, major head injuries and stroke.

For a more detailed list, trauma insurance can include the following:

Type of cover How it can help you
Heart conditions

In later life, heart conditions become far too common. Trauma insurance can cover you for an array of heart conditions including heart disease, heart attack, coronary artery disease, open-heart surgery, heart-valve surgery and cardiac arrest.

Intensive care

Illnesses or injuries which result in you being admitted to intensive care will be covered with a lump sum payment.

Cancer

If you are diagnosed with cancer, it can give you or your loved ones the necessary financial support to allow you to recover without financial concerns. This cover can pertain to both benign and malignant tumours.

Major organ transplants

If you have a major organ transplant due to a specific organ failure, trauma insurance will cover you so you can focus on the road to recovery.

Stroke

The older you get, your chances of suffering a stroke will increase. If you suffer a stroke, you’ll likely be out of work for a long period of time so it’ll give you the help you need.

Terminal illness

If you suffer a terminal illness and are out of work, you will be covered to ensure you can enjoy the remainder of your life spent with loved ones.

Coma

Accidents which put you in a coma will be covered under trauma insurance.

Severe burns

If you’re involved in a house fire or car fire and suffer serious burns, trauma insurance will cover you to make sure you can focus on your health and wellbeing.

Loss, or paralysis, of limb

If you’re involved in a serious car accident or have a fall from a ladder, you could find yourself or a limb paralysed, or even need to have it removed. This would be a confronting situation for yourself and your loved ones but trauma insurance will cover you to support your finances.

Dementia

While early onset dementia might not render you unable to work immediately, as the disease progresses you will be out of work for good. Trauma insurance will cover you and give you the financial assistance you need.

What’s not included in trauma insurance?

When taking out trauma insurance, it’s important you are aware of specific exclusions and situations where your claim may be rejected. These include:

  • Self-harm or suicide – serious injuries or critical illnesses as a result of self-harm won’t be covered by the majority of trauma insurance policies. Death or disability as a result of an attempted suicide will also be excluded. Similar to other life insurance policies, a suicide clause will be in place and stand for the first 13 months of your cover. After this period, your insurer may opt to waive the clause.
  • Waiting periods – these policies usually have a waiting period in place at the beginning of your cover. The duration of this period will vary but is usually for 90 days. No benefits for any critical illness or serious injury will be paid for during this period. If you’re transferring from an existing policy, an insurer may choose to waive the waiting period.
  • Situations surrounding pre-existing medical conditions – perhaps you have a certain pre-existing medical condition. If so, this may increase the chances of you getting a condition listed above. As a result, the insurer could try to exclude a specific condition from your cover or even add a loading to your trauma insurance policy.
  • Failure to disclose a pre-existing medical condition – if you don’t disclose a pre-existing medical condition to your insurer, you could have your claim rejected or your policy revoked. This is because your failure to disclose will have influenced the cost of your premium and your trauma insurance eligibility.

What’s the difference between trauma insurance, total and permanent disability (TPD) insurance and income protection insurance?

  • Trauma insurance provides cover for you when you’re critically ill or seriously injured. This cover is paid out through a lump sum amount with an aim to giving you the immediate financial support you need.
 
  • TPD insurance will provide you with cover if you are permanently disabled and unable to work ever again. You must be able to prove that you’re permanently unfit to work ever again in your current job, or any job which your qualifications would generally allow you to. Less serious injuries or illnesses than permanent disablement will often not be considered for benefits. TPD insurance cover is also given as a lump sum payment.
 
  • Income protection insurance will cover you for up to 85% of your income if you are critically ill or seriously injured and unable to attend work. Income protection insurance serves a different purpose to trauma and TPD insurance, as it acts as a replacement to your usual income stream and payments will typically last between two to five years. Income protection is paid to you either fortnightly or monthly and could suit business owners who don’t have annual or sick leave to get by.

What factors influence the cost of trauma insurance premiums?

Exploring your trauma insurance options and wondering what contributes to your premium? Find out here.

Pros and Cons of trauma insurance

Still trying to weigh up if you should take out trauma insurance? Consider these pros and cons.

PROS

Features a broad range of inclusions.

Most trauma insurance policies have wide-ranging cover for an extensive list of illnesses, diseases, and injuries.

Provides urgent financial support.

When you need funds quickly to cover certain costs if you’re critically ill or seriously injured, a lump sum payment will give you that financial support when you need it the most.

Tax-free lump sum payment.

No matter how large your lump sum payment is, it will be tax-free.

Free to choose how you spend your lump sum.

When you get your lump sum pay out, you can use the money for whatever you wish. Whether it be to pay off urgent debts, medical expenses or for living expenses, the choice is yours.

Peace of mind.

Should you suffer a serious medical incident, you and your family will have peace of mind in not having to worry about your immediate finances.

CONS

Strict rules on pre-existing health conditions.

Should an insurer determine that your pre-existing health condition may increase the chances of you suffering a specific condition, they can look to exclude cover for that particular benefit or apply loading to your policy.

Lower benefits with bundle policies

If you choose to bundle your trauma insurance with life insurance, any claim you make for a critical illness or serious injury may come out of your life insurance benefits. E.g., if you have life insurance of $500,000 and you become critically ill or injured and make a claim which results in a lump sum payment of $50,000, your life insurance payout would now be $450,000.

Doesn’t cover all illnesses or injuries.

Although there are a wide range of conditions included in trauma insurance, there are still many serious illnesses or injuries which you won’t be covered for. This could include injuries or illnesses as a result of self-harm, or pre-existing conditions which were not disclosed. These illnesses or injuries may still leave you out of work and out of pocket needing financial assistance.

Subject to waiting periods.

Your cover will be subject to a waiting period which is usually 90 days. Therefore, you can only make a claim on your trauma insurance if you have had your policy for that amount of time.

Top tips for comparing Trauma Insurance

Need some pointers to help you compare your trauma insurance policy options? Check out these top tips.

The critical illnesses and serious injuries included

Your health and wellbeing matter more than anything. It’s important you get cover which will support you across a range of critical illnesses and serious injuries.

Exclusions of the cover

You should also compare the exclusions tied to each policy you’re considering. Cheaper policies will tend to have a greater list of exclusions than more expensive ones.

Waiting periods of the cover

Trauma insurance policies will have waiting periods before you can make claims on the cover. You should try to find cover which has shorter waiting periods so that, should something go wrong, you’ll be covered sooner rather than later.

Benefit amounts applicable to your cover

Like all insurance, trauma insurance has a benefit amount which will apply to claims made on your policy’s inclusions. While it’s important you get cover with a benefit amount which adequately provides financial support in your time of need, you don’t want to be paying a high premium for a high lump sum payout which you won’t need. Similarly, you don’t want to be paying a low premium with a low lump sum payout which will still leave you, your partner, or your family with financial concerns.

Current premiums and long-term premiums

When comparing trauma insurance, you should consider the cost of your premiums currently, and what they will be in the future. While the cost of a premium might be more expensive now, the future price may not be as costly and it could be a cheaper option in the long run.

Frequently asked questions about trauma insurance

Still have questions which need answering? Here we answer the most common ones.

Do I really need trauma insurance?

When breaking down if you need trauma insurance, you should consider the following:

  • The lump sum amount you and your family would need if you were out of work for a long period.
  • If you have private health insurance, consider how much of your medical expenses it could pay for.
  • Should you have income protection insurance or TPD insurance, this could contribute to your financial needs if you are critically ill or seriously injured.
  • The support available to you from both family and friends – both financially and physically e.g., taking care of your kids.
Should I choose level or stepped trauma insurance premiums?

Level premiums – by choosing level premiums, your payments will largely remain the same and only increase when your insurer opts to raise their premium rates. By choosing level premiums, the cost at the beginning will be more expensive but your annual increases will be less than stepped premiums.

Stepped premiums – to begin with a stepped premium will be considerably cheaper than level premiums. However, the cost will increase year on year as it’s influenced by your age and choice of policy. Before taking out a stepped trauma insurance premium, make sure you account for the increasing costs and ensure you can afford it in the long run.

How much will my trauma insurance lump sum be?

The average trauma insurance lump sum payout is between $100,000-$500,000. This figure will differ between policies based on your own desires and the cover you take out.

What is standalone trauma insurance?

When taking out trauma insurance, you can opt for a standalone policy or a policy which links to your life insurance. A standalone trauma insurance policy is more expensive than a linked trauma insurance policy. However, the key benefit of a standalone policy is that if you make a claim under a standalone cover policy, the other insurance you have with the insurer – like life insurance – won’t be impacted.

Can I pay for trauma insurance through my super?

Trauma insurance is no longer available through your super fund. However, if you were with a super fund which happened to offer trauma insurance , you may find you are still covered. To find out you can either check your member statement or contact your super fund.

Can my lump sum amount from trauma insurance contribute towards my mortgage?

Yes. Your trauma insurance lump sum can go towards any debts or bills you have to pay including your mortgage. How you choose to spend your lump sum is completely up to you.

How do I get the best trauma insurance quote?

To get the best trauma insurance quote, compare your options online with Savvy. Our comparison tools will help you work out the best trauma insurance policy to suit your needs.